Annual Report 2019

China Merchants China Direct Investments Limited Annual Report 2019 100 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2019 5. FINANCIAL INSTRUMENTS (CONTINUED) Fair value measurement of financial instruments (continued) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (continued) 31 December 31 December 2019 2018 Increase(+)/ Increase(+)/ decrease(-) decrease(-) in fair value in fair value of assets if of assets if Relationship of 10% increase/ 10% increase/ Significant 31 December 31 December unobservable decrease of the decrease of the 31 December 31 December Fair value Valuation unobservable 2019 2018 inputs to fair unobservable unobservable Financial assets 2019 2018 hierarchy techniques input(s) Range Range value inputs (Note 2) inputs (Note 2) US$ US$ US$ US$ Unlisted equity (Note 1) 50,692,353 62,822,008 Level 3 Net asset value – Net asset value of the underlying investments 252,286- 33,400,705 5,067,607- 41,487,936 The higher the net asset value, the higher the fair value +5,069,235/ -5,069,235 +6,282,201/ -6,282,201 Unlisted equity securities (Note 1) 14,425,470 17,907,018 Level 3 Recent transaction price with discount/ premium – Discount/premium for events/changes after transaction price 0% 0% The higher the discount/premium, the lower/higher the fair value +1,442,547/ -1,442,547 +1,790,702/ -1,790,702 Unlisted equity securities (Notes 1 and 5) 8,610,705 — Level 3 Investment cost with discount/premium – Discount/premium 0% N/A The higher the discount/premium, the lower/higher the fair value +861,071/ -861,071 N/A Closing balance 728,881,441 634,210,176 Note 1: Financial assets at FVTPL represent those are measured at fair value with subsequent fair value gains or losses to be recognised in profit or loss. Note 2: Amount represents increase(+)/decrease(-) in fair value of the financial assets if the unobservable inputs were 10% increase/decrease while all the other variables were held constant. Note 3: The analysis of financial liabilities is set out in note 21. Note 4: Pursuant to the agreements, the loans, subject to the fulfillment of certain precedent conditions which are not under the control of the Group, could be converted into equity interest of Rong Bao Zhai Culture Co., Ltd. and Qinghai Provincial Qinghai Lake Tourism Group Co., Ltd., respectively. Given that the conditions are not under the control of the Group, the Directors consider that the conditions of conversion were not fulfilled as at 31 December 2019. Note 5: As at 31 December 2019, it is considered that the original investment cost remains the best estimate of fair value.